Sadly i am not surprised with the state of the economy and how blue collar workers salary are dwindling to minimum wage. I know people working 3 p/t jobs just to stay a float.

The lesson here is that if you're rich enough for the media to give a crap what you think, the economy's great!

As someone who deals with people's budgets on a daily basis on a finance forum, I can tell you that my experience shows that some people have crippling medical debt or were legitimately stupid about CCs and racked up tens of thousands of debt on plastic without a single asset. Those cases are easy. Moral hazard aside (said with a grimace on my face), bankruptcy. Hopefully with some knowledge beat into them, they won't screw up once they've pushed their nearly once a decade panic button.

Most, however, are people who think they legitimately need cable TV, have never heard of pay-as-you-go cellular, and refuse to pick up a second job. The merits of a second job are questionable due to the likelihood of costs like increased food costs that come with the need of more prepared food. However, most people just aren't willing to change their quality of life even if they're already living beyond their means. People just fucking love to coast until they're about to collapse from an unsustainable lifestyle. Just today I dealt with "but I only own 3 things" guy who believed that his ownership of only 3 assets qualified his standard of living. He also spent $300 a month in alcohol because "man, I'm 20 and deserve some fun."

Yes, every day I contemplate dying because I can't believe this is the norm of people dealt with.

To finally bring this all together and make this a contributing, content worthy post: IF YOU THINK YOU ARE IN TROUBLE, GET HELP. It is much easier to fix someone early. Also, just like compounding interest, the earlier you cut off that leak in the budget, the more money you'll have for emergencies down the road.

I'm glad to see that people are finally finding ways to cut costs and budget. One thing that's shared among 90%+ of people in trouble is that they've never budgeted. Ever. They have no idea where their money is going and then when some random hiccup happens in their life, BAM! One step away from homelessness. People don't understand that recessions happen, cars blow up, and people get sick. Some people view these as "random incidents;" smart people view them as "inevitable."

If you do not have one, PLEASE OPEN UP A SPREADSHEET AND DO A REAL BUDGET. Use cash for a few months to actually see where all your money goes if necessary, or keep track of all expenses on a CC (if you're financially stable and savvy enough to do so) so you can do the real math. You will see the REAL EVIDENCE of where your money goes and you'll be able to plan for the future. And, if you happen by me, you'll save me one pounding headache =)

I still think living comfortably is more about how wise you are with money, not how the economy is doing.

Of course there's widespread famine, war, or rampant inflation, and there are emergencies that come up like death, losing a job, a medical issue, etc.

Barring those, though, people are generally stupid with money. Especially here in the US. If someone is "living paycheck to paycheck" and no catastrophe has befallen them, then I call that stupidity. That person is living above their means.

Do most people know the value of SAVING money versus spending everything? Do people understand that they shouldn't spend money they don't have? That they should live *below* their means? That debt is generally bad?

I can sympathize with unforeseen circumstances IF the person isn't a fool with money. Otherwise, I have very little patience for the general populace blaming their lack of riches on the economy.

@WillB: I completely agree, see my post below which is almost the same thing :)

@WillB: Like you said earlier in the comment, often times even though people KNOW where the money is going, they might still think that X is a legitimate expense.

IMHO, an expense is only "legitimate" if it is a need or if it is well within your budget.

Now I am not sure if my sample population is screwed, or if a high percentage of people are actually of that mentality, but for some reason they still think that something they clearly cannot afford and can easily live without is still something they just NEED to have.

Sometimes people get into trouble because of unforeseen circumstances, and sometimes they get in because of carelessness. But then there are those cases where most of the pain is just self inflicted. And from what I have observed, those kind of cases are the hardest to solve.

if you make $100K a year and you're living paycheck to paycheck, you're doing it wrong.

@GuinevereRucker: Agreed for the most part except for a small caveat with which I am sure you will agree:

If a person is living paycheck to paycheck because his/her paycheck just barely covers their needs, they are exempt from being called stupid.

survey says: If you're not eating catfood tonight, you couldn't get any from the Nigerians

@bubbledumpster: i work in an area of Charlotte (Ballantyne) where "rich people" live (the area in specific i'm thinking of is legally outside of Charlotte, in the town of Marvin - people have very high salaries, living in 5000 sq ft houses that they paid $750k for) The area has always functioned like an eonomically depressed area, because everyone lives in expensive houses, drives an Escalade during the week and a beamer on the weekends, with very little savings or emergency funds.

these people are definitely doing it wrong.

@WillB: Thanks, WillB for that PSA. It's sad but true that people can obtain debt that would take a lifetime to pay off. Sadder that they eagerly descend into this type of debt.

@WillB: And that is my beef with the whole healthcare debacle. Yes, there are legitimate people who are unable to pay and they should be helped. What percentage of the "uninsured" have health insurance as any sort of priority? Does health insurance fall above or below HD Cable? IPhones + data plans? Brand new car? Downtown condo?

Fact is, people prefer to pay for things that have a perceived instant value vs. paying for something that they may not ever need.

I'm stealing from my employer to make ends meet. What percent am I in?

$100K per year and living paycheck to paycheck? If you live in a very expensive area that is possible. San Francisco and New York City come to mind. But if you live nearly anywhere else, you probably have too much house, car payments and toys. The secret, if possible, is to live below one's means. It is possible. But you have to change your mindset and basically not care about keeping up with the Jones', who are probably all hat and no cattle anyway. I had a new neighbor that put all kinds of home improvements in. Most were not necessary. I later found out he put all the improvements on credit cards and had $70k in credit card debt. He was making $110K per year but he was living on the edge. He had no investments beyond his highly levered house. I don't know how he could sleep at night. At age 57, he had lots of debt and no nest egg. One job problem will probably lead him to bankruptcy.

The secret? to living well is to live below your means. Small house, one dependable car, eat correctly so that we don't become ill, and here we are 80 plus years and living well.

@GuinevereRucker: I totally agree with you. I think we can make a few exceptions here, like what MostlylHarmless mentions. Or someone who is in severe medical debt because of things beyond their control.

Otherwise it seems that no one saves any money these days, and everyone goes and spends it on the latest and greatest iPod or whatever every single year when a new one comes out. Even those people who are truly struggling seem to have no trouble paying an $80 a month cell phone bill. Its a phenomenon that I will never come to understand.

@WillB: There's a free tool called wesabe which can help you keep track of your spending on multiple accounts, like a credit card, debit card, etc. Worked really well for me - I spotted a couple hundred dollar cost I could eliminate on my first run-through.

break out some ripple to celebrate!

RACIST

You hate Obama because he is black.

@carlos_the_dwarf:

?

@winshape: As someone who spent a good chunk of December in the hospital a couple years ago, screw you.

My husband pays a crap load of child support (including half of her private school tuition, which he has no say in), but they still factor his entire income into MINE before they decide whether or not I'm supposed to have health insurance or not.

I can't get state health insurance because I'm not pregnant/can't get pregnant. I can't afford health insurance on my own because I can only find part-time work, and my husband's insurance plan requires that he pay for himself and his non-custodial child before he's allowed to insure me, and we can't afford that.

My state told me they needed teachers with a Masters, so I got a Masters. Then they told me that education is for morons, and cut MOST of our education budget, so I can't start my adult career. So now I have student debt and no prospects for a salary, unless I go back into grad school and get ANOTHER degree, AND all the while, I'm going to have to have follow-up operations from my original hospitalization, and I can't afford to even walk into the E.R. at this point, because the state pulled funding for most of that as well.

Screw you and your overgeneralizations about priorities. I drive a 1990 Toyota that I've had to pretty much REBUILD from the block up over the three years I've had it. We have cable in the house because my roommates insist upon it. My phone is the basic one that comes with my plan, and my husband's phone is through his work. We don't drink, party, or entertain unless it's the barest minimum potluck.

Fact is, there are LOTS of people that are in my situation. They're not lazy, nor even entitled, spoiled brats. They're just people that the broken-ass system is designed to keep out.

@bubbledumpster: Thats what I was thinking while I was reading this. I know a few families that have broken up over the recession, and both parties are living in exponentially lower-class housing now because of how they "had" to live before.

@gStein: ^.^ unless you have alien weaponry.

Had you seen the unit price of catfood? I think you're better off with store brand Raviloios.

@MostlyHarmless: Of course, exception granted.

The real catch though is your second paragraph with that curious word "needs". Many people have a vastly different definition of what that means!

@SpiderJerusalem: Move. You need to move. You will have lots of excuses not to move. Move.

@Linkdead: The future unemployed and unemployable percentage.

@bubbledumpster: I see what you're saying, but in view of how rich we are compared to your average person in the world, and you can extend that right on down to the "poor" in the US with ease.

My wife and I make $42,000 combined, and I consider us filthy rich. How DARE we call ourselves poor when we have all our needs met and so many luxuries.

Wisdom with money doesn't increase the more or less you make per year.

@GitEmSteveDave_HasANewNameToday: Yeah, cat food (and pet food generally) is expensive. A can of tuna costs less than a can of cat food.

@MostlyHarmless: No. Disagree. If this is a long-term situation, that person is the biggest dummy of them all.

I have to tell people things they don't want to hear. It's usually "move," "get a better job," or "your college time was a near waste."

People never, ever move. They just wallow in their miserable local economy. PARENTS! FAMILY! BOYFRIEND! No, people need to FUCKING MOVE.

People also don't like to get better jobs. There are no jobs! Unemployment! If he or she is not marketable or the best candidate for the jobs opening up (which would be available if they'd JUST MOVE), that's the individual's fault.

People also like to think it's still the 80s where you could get any old degree and become some consultant or professional. Yes, you can get any degree and be successful, but that is on the individual. If you know you're not going to aggressively pursue co-ops, internships, and graduate studies, you better have a great in with a company or be prepared to struggle on the job market.

The only thing I personally let people slide on is "medical debt." The USA is a joke when it comes to that and well, I guess nearly 70% of bankruptcies would qualify as "exempt" since that's the current rate of medical-related bankruptcies.

@WillB: Moving is not an option if Spider's husband wants to be a father in the life of his daughter.

Spider, your story makes me so sad, but it's a familiar one. I wish I had a decent suggestion to offer. :-(

@Slave For Turtles: That is a cost of life. They can either be near the daughter and poor or away and not poor. People can't have it all.

@SpiderJerusalem: You lost me at "private school tuition".

@WillB: as someone who had to move more than a few times before recently buying a house, you can't always choose when you move. and it's expensive to move. more than once i've been technically homeless from having to move but not having the money to have anywhere to go to.

i once had two jobs, no vehicle, no insurance payments, no fast food expenses and in fact most of what i ate i got as free food from discarded orders at the taco bell where i worked or the cinnabon where my roommate worked.
and then my roommate brought home a dog that violated the lease and the landlady stopped by that day coincidentally and started eviction proceedings. i didn't have enough money to move my stuff because i was barely making enough a month to pay the $250 my friend was charging me for rent to sleep on her sofa.

i had to abandon everything i owned except what fit in a backpack and a suitcase. and then i went to sleep on another friend's floor for three months while i saved enough money to pay some rent and still didn't have enough for a deposit on a decent place.

my mom threw me out of the house the week after my high school graduation. had to abandon even my plans for community college because i hadn't been allowed to work my senior year of high school and had $500 in the bank left from working a few months the year before.

sometimes moving to improve your situation is NOT an option.

ok, so what if you have been layed off for a year, on foodstamps and medicad, and your unemployment checks dont make ends meet. I just sent two bills that both checks are going to bounce because I needed gas to go apply for jobs. so when rent comes around next month and my account has charges so deep I cant afford it, what percent am I in?

@Its The Beer Talking: She didn't say WHY the kid was in private school. Maybe the public school where the kid lives is really bad or dangerous, or maybe there is some other problem. She did say the husband doesn't have a say over it. There's obviously something else going on.

@SpiderJerusalem: I'm sorry things have been going so tough for you. I hope you feel better soon.

@catastrophegirl: Totally. And if you have a house, what if you can't sell it and are making payments on two homes? That can suck the money right out of your account fast.

@RBraden: What if I don't want to live to be 80?

@kaseyk85: The percent of which I am going to tell the Universe to get cracking on getting you back on your feet.

Hang in there.

@HogwartsAlum: yeah my friend is a realtor and moved out of her condo, rents it out and now rents a tiny place from a private owner for a lot less. her place has been on the market over a year and at first she didn't rent it out. went through all of her savings before she accepted that it just wasn't going to happen. the way the market it right now, she's feeling great about the fact that she currently has three clients. most realtors in this area have picked up other jobs.

@bubbledumpster: I tried telling that to my parents circa 2007. Fast forward to the first half of 2009, they were almost homeless.

I try not to act like "the young adult who knows everything already", but...they make it hard not to.

I eat government cheese and live in a van down by the river.

@catastrophegirl: I think it's unfair for you to post the unfortunate nature of your life story without knowing the full details. I've known people who were completely responsible for their circumstances and I've known people who were completely blindsided by the randomness in life.

@HogwartsAlum: If you bought a house without looking at something as simple as the Case-Shiller Price Index in the last 3 years, I have no sympathy for you.

@WillB: i think i pretty much included full details except "my mom and i don't get along so a week after high school graduation she handed me a set of suitcases, some pots and pans and said 'you have until friday, get out'" it was sunday.

i was supposed to start at community college in the fall and had expected to be able to work over the summer to save money, and in fact had started a job the morning of graduation as second assistant manager at a retail store. i kept the job but had to give up college after a few weeks because public transportation didn't go there and i couldn't walk that far from the friend's couch i was sleeping on.
the situation i moved into [the friend's couch] got me into a worse position by getting me evicted. moving isn't always the answer. sometimes it makes your financial situation worse.

and then i lost the job because my boss was busted embezzling and the store closed. good thing i could pick up more hours at taco bell, eh? because $4.15 an hour [at the time] was surely enough to live on, right?

there are times when you can do nothing in your life but work jobs 1 and 2 for minimum wage, sleep 5 hours, go back to work and STILL not be able to make rent or afford the basic necessities of life.
you want to know how i got out of that hole? selling drugs. i couldn't afford my own room in a shared living situation until i was making extra money selling weed to my coworkers.

i'm a well spoken, fairly intelligent [except for the selling drugs thing, although i didn't get caught] causcasian female from an upper middle class family in a major metropolitan suburb. aren't these all the things sociologists say don't happen to "that class of the population" ?

a bad living situation can happen to anyone at any time and it doesn't always involve major life mistakes. my mistake, as i see it, was not expecting my mom to throw me out. sometimes there is no support in your support network. sometimes you don't have a place to go where you can save money to improve your situation.

and yes, i did get past it, work my way out of it and get ahead. but moving to another place wasn't the answer for several more moves from couch to car to couch.

at this time, the way the economy is, i'm ahead for the time being because of those lessons in how to not be frivolous with money. but even not being frivolous, i'm not as far ahead of the next paycheck as i'd like to be.

I make $170,000 per year and even that's not enough to live on! I have a spouse and two teenage children to clothe and feed. I have three cars to insure - yes they are all paid off. I have a crippling mortgage plus utilities to pay each month. And, yes, I am a member of a country club, but I must have this for work. We have three pets.

We are living paycheck to paycheck. Last month, I called my mother-in-law and asked for some money to buy the children birthday presents. I really hope this administration takes my plight under consideration and gives me some relief. This is crippling, seriously.

I take exception to the "stealing from your retirement" comment. It's your money, you pay penalties to take it out that equate to making it Gross Income (within reason). It's more like "stealing from your future self to be a sweet 40" flat screen tv"

One way to make your money stretch farther is to work in a big(ger) city and live outside of it. That's what I do and I get twice as much for my money as my coworkers who live in the town proper.

@catastrophegirl: You should have joined the military. Whatever your ideology, one of their best points is that they take people who have been dealt a shitty hand and give them a chance to make their lives better.